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White House Responds to Campaign Staff Indictments, Plea

White House press secretary Sarah Huckabee Sanders on Monday sought to distance the White House from the indictments of top presidential campaign officials Paul Manafort and Rick Gates and the guilty plea of campaign aide George Papadopoulos. (Published Monday, Oct. 30, 2017)

An indictment unsealed Monday detailing conspiracy and money laundering charges against him suggest they certainly caught the eye of special counsel Robert Mueller.

A luxury clothing store in New York is among 19 vendors Manafort paid some $12 million to between 2008 and 2014 from foreign bank accounts he didn't disclose, using offshore companies registered in countries such as Cyprus and the Grenadines to make the purchases, court papers allege.

Besides the suits, Manafort used the money to buy antique rugs and art, make payments on three Range Rovers and install an $112,825 audio-visual system in his Hamptons home — all without paying taxes on that income, the indictment charges.

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Manafort, who Mueller has charged with working as an undisclosed foreign agent for Ukrainian interests, turned himself in Monday. He hasn't commented but has previously denied any wrongdoing. He and former deputy Rick Gates pleaded not guilty during a Monday afternoon court appearance. His lawyer, Kevin Downing, called the indictment's charges that Manafort used offshore accounts to conceal funds from the government "ridiculous."

The 19 vendors aren't named in the indictment. But government investigators probing Manafort's work in the Ukraine and elsewhere have been curious about his six-figure spending on custom-made blazers and trousers for years, according to people familiar with the case.

For investigators, getting into the precise nature of what Manafort did in Ukraine posed plenty of problems, not least because of its distance from the U.S. and the reliability of sources there. A simpler approach was to demonstrate whether Manafort controlled overseas bank accounts that had never been reported to the IRS, and that he had spent that money in the United States.

At one point federal investigators theorized the purchases might have been on behalf of his clients from the former Soviet Union, whose reputations in the West Manafort was being paid to improve, said one of the people, who wasn't authorized to discuss the investigation and spoke on condition of anonymity.

After FBI agents raided Manafort's Virginia home in July, investigators reportedly photographed the suits in his closet. Manafort spent nearly $900,000 at a luxury clothing store in New York dubbed "Vendor E" in court papers.

Documents obtained by The Associated Press show Manafort has made past payments to a New York tailor named Eugene Venanzi, whose former store on Manhattan's Fifth Avenue advertised in Trump Magazine and sold to fund managers, financiers and celebrities, court records show.

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In the span of just six days in July 2008, the records show, Manafort spent close to $100,000 on $8,500-a-piece custom cashmere and silk sport coats, bespoke trousers, multiple $7,000 suits and other items.

Venanzi, who pleaded guilty in 1999 to a bank larceny charge, said in a 2007 deposition in a civil suit brought against the company by a former employee that the company never made any money and sometimes failed to pay payroll taxes.

His former business partner, Anthony Fortunato, told the AP his business relationship with Venanzi soured and he put a lien on the tailor's Connecticut home to recover money he was owed.

Reached by phone on Monday, Venanzi, 74, said he'd not been contacted by the authorities but declined further comment before hanging up.

In a deposition, he said he took a trip to Russia "to develop a market with certain clientele of Russian origin" but didn't pursue any deals there because he didn't feel safe there and "didn't want to take the risk."

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That might be a reference to the famed men's clothing store House of Bijan, where Manafort spent generously, according to someone familiar with his lifestyle. An email sent to the store wasn't immediately returned and calls to the store rang unanswered.

Daniel Alonso, the former chief of the criminal division in the U.S. Attorney's Office in Brooklyn, said paying for suits and other items in the U.S. via an offshore account registered in Cyprus was "a very, very odd way" to make such purchases.

"A hallmark of money laundering is trying to make illegitimate money look legitimate," he said.